E-commerce giant, eBay, cuts CEO's pay by 53%

E-commerce giant eBay has cut the total compensation of its chief executive, John Donahoe, by more than half.

Donahoe was paid $13.8m (£8.3m), including salary and bonus, in 2013, down from $29.7m a year ago.

While his basic salary rose by 2 per cent, Donahoe’s annual cash incentive fell by 43 per cent from a year earlier.

The company said that while their chief executive had performed well, the firm’s financial performance “did not fully meet expectations”.

eBay generated earnings of about $850m in the final quarter of last year – an increase of 13 per cent – but its results have not been meeting expectations.

However, the main explanation for the severity of Donahoe’s pay cut is his one-time award of $14.8m in performance shares in 2012, which doubled his compensation that year.

His sharp drop in pay comes amid an ongoing battle between the firm and activist shareholder Carl Icahn over its online payments business, PayPal.

Icahn has called on eBay to spin off PayPal, which it acquired in 2002 for $1.5bn (£905m)

It has been a key driver of eBay’s growth as an increasing number of consumers turn to online shopping, prompting increased use of online payment services.

The division accounts for nearly 40 per cent of the firm’s total revenue.

Icahn, who owns more than 2 per cent of eBay’s shares, has also nominated two people to eBay’s board.

However, on Monday eBay said that its board of directors “does not endorse any Icahn Group nominee or the Icahn proposal”.